India's growth is expected to be steady at 6.7 per cent per annum over the next the two fiscals beginning April 2025, the World Bank said on Thursday in its latest growth estimates for South Asia.
South Asian growth is to increase to 6.2 per cent in 2025-26 as firm growth is projected in India, according to the World Bank.
"In India, growth is projected to remain steady, at 6.7 per cent a year for the two fiscal years beginning in April 2025," it said.
"The services sector is expected to enjoy sustained expansion, and manufacturing activity will strengthen, supported by government initiatives to improve the business environment. Investment growth is projected to be steady, with moderating public investment offset by rising private investment," the bank said.
Growth in India is expected to ease to 6.5 per cent in fiscal year 2024/25, which runs from April 2024 to March 2025, reflecting a slowdown in investment and weak manufacturing growth, it said.
"However, private consumption growth has remained resilient, primarily driven by improved rural incomes accompanied by a recovery of agricultural output," the World Bank said.
Excluding India, the region is estimated to have accelerated growth to 3.9 per cent in 2024, largely due to recoveries in Pakistan and Sri Lanka, which have been supported by better macroeconomic policies adopted to counter earlier economic problems.
According to the report, political unrest in Bangladesh in mid-2024 dampened activity and eroded investor confidence. Supply constraints, stemming from energy shortages and import curbs, had weakened industrial activity and put further upward pressure on prices, the report said.
Growth in the region, excluding India, is expected to strengthen to four per cent in 2025 and to 4.3 per cent in 2026, though the forecast for this year is slightly lower than in June mainly due to a downgrade for Bangladesh amid economic and policy uncertainty, it said.
Bangladesh's growth is expected to ease to 4.1 per cent in FY2024/25 (July 2024 to June 2025), before picking up to 5.4 per cent in FY2025/26.
Amid heightened political uncertainty, investment and industrial activity are expected to remain subdued in the near term, it said.
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